Lyft Class Action Sent to Arbitration

SAN FRANCISCO (CN) – A federal judge dismissed and sent to arbitration a class action from Lyft drivers who claim the ride-sharing company stiffed them for referral bonuses it promised. U.S. District Judge Elizabeth Laporte on Tuesday granted Lyft’s motion to compel arbitration and dismiss lead plaintiff Casey Loewen’s lawsuit over Lyft’s bonus program for new driver referrals. Whether looking for a ride or to become a driver for Lyft, people must download the Lyft app and agree to its terms of service, which includes mandatory arbitration for any disputes, Laporte wrote. Although Loewen and co-plaintiff Jonathan Wright agreed to the arbitration mandate, they say Lyft committed “procedural unconscionability” by requiring them to agree to arbitration to obtain and use the app needed to apply to drive for Lyft, which amounts to a contract of adhesion. They claimed “that the oppression of this adhesion contract is amplified because they were required to assent to the TOS [terms of service] to ‘obtain a necessary source of income’ and liken the TOS to an employment agreement.” Lyft claims they are independent contractors, not employees. Laporte found that the “alleged failure to pay a referral bonus” is “far more akin to a consumer dispute than an employment dispute.” Lyft’s referral bonus program offered drivers a $1,000 bonus for referring new drivers who completed their first ride by a specified date. The new driver also received a $1,000 bonus. Loewen and Wright claimed the arbitration mandate does not extend to their dispute over breach of contract, fraud and negligent misrepresentation.But Laporte said the agreement covered “all aspects” of driving for Lyft, and found that the company “is not ‘wholly groundless'” to apply it to the bonuses dispute. Laporte said there is no “compelling reason to keep this case on the court’s docket” and granted Lyft’s motion to compel arbitration and dismiss the class action.